Trade war a concern for global economy

ICCB says in news bulletin

Trade and economic relations between the US and China are of great significance for the world economy, says the ICCB. Photo: Reuters/File

Star Business Report

The US and China should immediately bring the ongoing trade war to an end as the conflict is a major concern for the global economy, said the International Chamber of Commerce Bangladesh (ICCB) yesterday.

It said a trade war cannot help the constructive cooperation in the US-China relations.

“So, it is crucial for both the countries to mitigate the ongoing rivalry without losing any further time to ensure sustainable global economic growth,” said the chamber in its editorial of the current news bulletin for October and December of 2018.

It said trade and economic relations between the US and China are of great significance for the world economy. The recent trade friction has clouded their relations.

The tariff fight between the two countries is often cited as the biggest risk to global investor confidence and a threat to the world economy.

According to a recently released white paper by China, the Trump administration has instigated a trade war with China by imposing tariffs on a total of $250 billion of imports from China. As a counter to the US move, China is also imposing tariffs on $110 billion of imports from the US.

There have been warnings from both the private and public sectors about the potential spillover effects on the world economy of the ongoing trade war.

For most Asian nations, China is their single biggest trading destination while the US remains an invaluable economic partner.

“As a result, the escalating tensions between the two economic giants have caused unease for the region,” said the ICCB.

Raising tariffs and non-tariff trade barriers will disrupt the global value chain, slow down the spread of new technologies, lead to a drop in global productivity and investment, and ultimately slow down growth trajectory, noted the International Monetary Fund in its World Economic Outlook in April 2018.

In October, the IMF also cautioned that all countries would suffer as a result of the tensions and cut back its GDP projection for the US to 2.5 percent in 2019 and 1.8 percent in 2020. This has undoubtedly cast a long shadow worldwide at a time when US growth has been critical to the global economy.